Federal Budget

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One of the most misunderstood problems in America is the federal budget deficit. It is often assumed that reducing the budget deficit is always a good thing and therefore the aim of budget policy should be to balance the budget. Joseph Stiglitz — Nobel Laureate and former head of Bill Clinton's Council of Economic Advisors — argues that budget policy should not be fixated on balancing the budget, but rather about prioritizing the nation's needs including public investments in such areas as early childhood development, access to education, environmental protection and public infrastructure. And with a possible recession on the horizon, Stiglitz argues that Keynesian style deficit spending will be called for. Henry Aaron from the Brookings Institution demonstrates that there is no long term "entitlement crisis." There is a real problem, Aaron argues, with growing public and private health care costs. The solution to this problem is not to cut entitlements, but rather comprehensive health care reform. EPI economist Max Sawicky argues that public spending for infrastructure and research, which has dropped precipitously since the 1980s, has historically played a driving role in the U.S. economy. Joan Lombardi, Director of the Children's Project, cites impressive research showing that policies geared towards early childhood have huge payoffs in the long run.

Event transcripts

Beyond Balanced Budget Mania: April 12, 2007. Read full written transcript.[PDF] Review video, audio, and slideshows from this event.

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